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Results of operations
--------------------------------------------------------------------------------------------------------------------------------------------------------Consolidated Results For the three months ended December 29, December 31,(In thousands of dollars, except for volume 2012 2011and per share information) (Unaudited) (Unaudited)--------------------------------------------------------------------------------------------------------------------------------------------------------Volume (metric tonnes) 156,415 172,754--------------------------------------------------------------------------------------------------------------------------------------------------------Revenues $ 142,376 $ 175,805Gross margin 30,639 23,654Administration and selling expenses 4,612 4,578Distribution expenses 2,329 2,307----------------------------------------------------------------------------Earnings before interest and provision for income taxes (EBIT) $ 23,698 $ 16,769Net finance costs 2,202 2,892Provision for income taxes 5,363 3,997----------------------------------------------------------------------------Net earnings $ 16,133 $ 9,880----------------------------------------------------------------------------Net earnings per share - basic $ 0.17 $ 0.11--------------------------------------------------------------------------------------------------------------------------------------------------------
In the normal course of business, the Company uses derivative financial instruments consisting of sugar futures, foreign exchange forward contracts, natural gas futures and interest rate swaps. The Company sells refined sugar to some clients in U.S. dollars. These sales contracts are viewed as having an embedded derivative if the functional currency of the customer is not U.S. dollars, the embedded derivative being the source currency of the transaction, U.S. dollars. Derivative financial instruments and embedded derivatives are marked-to-market at each reporting date, with the unrealized gains/losses charged to the consolidated statement of earnings with a corresponding offsetting amount charged to the statement of financial position.
Management believes that the Company's financial results are more meaningful to management, investors, analysts and any other interested parties when financial results are adjusted by the gains/losses from financial derivative instruments and from embedded derivatives for which adjusted financial results provide a more complete understanding of factors and trends affecting our business. This measurement is a non-GAAP measurement.
Management uses the non-GAAP adjusted results of the operating company to measure and to evaluate the performance of the business through its adjusted gross margin, adjusted EBIT and adjusted net earnings. In addition, management believes that these measures are important to our investors and parties evaluating our performance and comparing such performances to our past results. Management also uses adjusted gross margin, adjusted EBIT and adjusted net earnings when discussing results with the Board of Directors, analysts, investors, banks and other interested parties.
